The non-major lender reported that its loan book grew by 14.4 per cent to $2.7 billion in the 2015-2016 financial year, largely due to the amount of loans acquired through the merger.

Auswide Bank managing director Martin Barrett told Mortgage Business that the merger was the first between a listed ADI and a mutual in 11 years and for Auswide, “demonstrated that it can be done”.

“We have a willing board that have a view that a particular offer – in this case, one that represented a bigger branch network, a larger balance sheet to support customers and a bigger distribution network, as well as payment to members – they saw that as representing, ultimately, the best interests of members and members overwhelmingly voted for it,” he said.

“We found that there was a relatively difficult path to go through all the regulatory and legal requirements of the transaction, because one of these types of deals haven’t been done for so long. Nonetheless, we got through that.

“We believe now, given the fact that the merger has been successful, that we have the templates, the corporate knowledge, the opportunity to be able to engage with other mutuals and the IP to be able to bring those transactions to success.”

Mr Barrett added that mergers and acquisitions in the mutual space is “inevitable”.

“The regulatory environment is tougher, the market itself is tougher, the interest rate environment is a difficult one to navigate, and many of the smaller mutuals just don’t have the balance sheets, the resources and the capability to be able to be successful in the current and possibly future environment,” he said.

Mr Barrett said many mutuals have “fairly small customer bases” which are not growing and instead tend to be declining.

“That really does challenge the sustainability of some of these businesses. We would hope that the boards grapple with those issues and consider the future of the particular mutual, and that they would consider us being a potential partner to have a conversation with.”

Commenting on mainstream media reports earlier this year of MyState Bank’s plans to acquire Auswide, Mr Barrett, “I can confirm that we did have a conversation with MyState, but ultimately that proved to be an unsuccessful conversation.”

Auswide revealed in its ASX investor presentation that it acquired a 19.3 per cent equity stake in Australia’s second fully-licensed peer-to-peer lender MoneyPlace, settled on 4 January 2016.

Auswide said at the time that the stake in MoneyPlace positions the bank to benefit from technology disruption across the banking sector and accelerate consumer lending ambitions.

Mr Barrett remarked that the relationship with MoneyPlace has been successful.

“We’re seeing some significant improvement in terms of the consumer finance that’s been generated through there,” he said.

“We do have an interest in terms of looking at what might be in the fintech space around business banking and what might be in the fintech space around home lending as well.”

“We look to see how these organisations might challenge the way we think about doing business.”